Posted by Tim Stobbs on December 9, 2010
Sovereign debt crisis? Greece,check. Declining oil production? Depending on who you believe, check. Ineffective world leadership? All I have to say is Cancun climate conference, check. So yes some days it does really feel the world is going to end sometime soon. Yet twice now this week someone has asked me if that is the case, then how the hell do you invest for it? I don’t pretend to know, but what the hell, let’s take a stab at an answer just as an exercise.
Well according to some people the answer lies in getting some physical gold that you own. That way when hyperinflation hits you will have something that will retain its values as world currency markets fall in on themselves. Yet that mind set ignores the fact that will anyone really even care about gold if the world really did go to hell? Personally I think some seeds and a garden plot are going to be a lot more useful. Beyond that a good wood stove to heat your house might be a good investment.
Yet those lines of thinking are the extreme. A civilization collapse doesn’t typically just occur over night, but rather breaks downs in pieces slowly over time. There will be a transition phase where things start slowly with local shortages of some items like your grapes from Chile so most people won’t even really care. So if the world truly is on the downward slope of oil production I would get into owning some oil because on the way down the slope of production that oil is about to get a whole lot more valuable. Also if oil does get unstable power production might just get a whole lot more important to people as a backup source of energy. So owning a stable utility with low natural gas/oil in the generation mix would be a good idea.
Other than those obvious ones you would have to start thinking in terms of strategic resources: what are people going to need during the transition. The most basic of those is food, so I would take a hard look at fertilizer companies. Then if you are really worried about eating, start going down to your local farmer’s market and make some friends with the vendors. As global supply lines have issues knowing where you can get food locally would be a great idea.
Then perhaps the best investment of all would be to have a good circle of friends and family around you. Why? It’s basically suicide to think you could have the skill sets to live by yourself. People today are so depending on the systems around us that in a true survival situation we would be screwed. For example, think about those 72-hour commercials? Could you survive a power outage that lasts for days? Now apply that for a week? How would you do by yourself? Likely not so good, but as a group you would likely stand a better chance of having some useful skills between you to make it work.
Anyway that’s my random thoughts on investing for the end of the world. What would you do to invest for the end of the world? Feel free to suggest anything, I didn’t particularly hold back with my ideas.